EMS Stock with 55% EBITDA Growth Guidance and ₹6,400 Cr Order Book to Add to Your Watchlist

Synopsis: This EMS company delivered robust Q3 performance with broad-based segment growth, strong exports, and confident EBITDA guidance, supported by strategic acquisitions and a Rs 6,400 crore order book.

Syrma SGS Technology Limited is an electronics manufacturing services (EMS) company that provides end-to-end solutions, including product design, printed circuit board assembly (PCBA), box build, and full system integration for original equipment manufacturers across automotive, industrial, healthcare, IT, railways, and consumer electronics sectors, serving both domestic and export markets.

With a market capitalization of Rs 15,846, the shares of Syrma SGS Technology closed at Rs 821.80 per share, down by 1.30 percent from its previous close. The company trades at an overvalued P/E of 55.7x compared to its Industry P/E of 28.7x, and has returned 165 percent since its listing in 2022.

Financial Performance (Q3 FY26): The performance remained strong, with revenue up 45 percent YoY to Rs 1,274 crore. EBITDA more than doubled, surging 101 percent to Rs 159 crore from Rs 79 crore, while PAT grew 108 percent YoY to Rs 110 and Rs 27 crore, respectively. Export momentum was notably robust, rising 66 percent YoY to Rs 335 crore versus Rs 202 crore in the same quarter last year, reflecting strong operational execution and healthy demand across key markets

Segmental Growth (Broad-Based Momentum): Diving into more granular details, what is encouraging and reinforces our confidence in sustaining this performance is the broad-based growth across all verticals. Auto grew by 30 percent, MedTech by 31 percent, and Industrial by 29 percent. IT and Railways, despite a smaller base, delivered an impressive 70 percent growth, reflecting healthy momentum across all four key business segments.

Guidance & Outlook: The company is confident of surpassing its earlier margin guidance. Initially targeting an 8 percent EBITDA margin, later revised to 9 percent, it now expects to deliver over Rs 500 crore in EBITDA, up from Rs 324 crore last year, a 55 to 57 percent growth versus the guided 30 percent. Looking ahead, the company aims to capitalize on emerging opportunities and sustain healthy growth across all verticals, targeting a 30 percent growth rate next year.

The company has a strong presence in the EU, with 30 years of export experience and a plant in Germany. Exports have grown 45 percent over nine months, reaching Rs 837 crore, and management expects it to surpass Rs 1,000 crore, potentially nearing Rs 1,100 crore next year, supported by the long-term benefits of the FTA.

Margins: Gross margin improved to 27.4 percent from 26 percent YoY, driven by a higher export mix, increased ODM contribution, stronger share of industrial and healthcare segments, and a relatively lower consumer and IT mix. The company continues to focus on operational efficiency initiatives to further strengthen margin performance going forward.

Balance Sheet & Cash Flow: The company’s debt position remains strong, with total gross debt of Rs 529 crore as of December-end. Coupled with a healthy treasury balance of Rs 933 crore, this results in a net cash position of Rs 404 crore as of December 8, reflecting robust financial health and providing ample liquidity for ongoing operations and strategic initiatives.

Capex & Order Book: Capex spending is on track, with Rs 55 crore spent during the quarter and approximately Rs 115 crore over nine months. As of December-end, the order book stands around Rs 6,400 crore, comprising 31 percent from auto, 25 percent consumer, 27 percent industrial, and the remainder from healthcare and IT/railways, reflecting strong business visibility.

Strategic Update: The merger has been completed, streamlining the corporate structure and consolidating operations. Management remains focused on scaling high-margin verticals, driving operational efficiencies, optimizing working capital deployment, and strengthening operating cash flow generation to support sustainable growth.

Syrma SGS completed the acquisition of a 60 percent stake in Elcome on December 17, 2025, for Rs 2,350 million, with financials consolidated as of December 31, 2025. Additionally, the company advanced its PCB venture in partnership with Shinhyup, Korea (75:25), completing a Rs 45 crore capital infusion. Site development and civil construction are underway, supported by PLI and state incentives.

In other strategic initiatives, Syrma SGS is progressing with its Solar Inverter JV with Premier Energies, focused on acquiring Ksolare, with transaction closure conditions in process. Similarly, the Elemaster Joint Venture Agreement is also under transaction closure review, reflecting the company’s continued expansion and strategic partnerships across high-growth segments.

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